Colombian airline Avianca has filed for Chapter 11 bankruptcy in the U.S. Southern District of New York citing a fall of additional than 80% in consolidated income as flights remain grounded due to the COVID-19 pandemic.
In a assertion, the enterprise reported it would use the bankruptcy to balance its sheet obligations to navigate the consequences of COVID-19 and to deal with liabilities, leases, aircraft orders, and other commitments. The enterprise also reported it intends to wind-down its functions in Peru.
In a analysis report, analysts at the Centre for Aviation reported Avianca was in a “period of upheaval” even ahead of the worldwide wellness crisis. In April 2019, CEO Hernan Rincon Lema announced he was leaving the enterprise right after three decades in the part.
The enterprise also observed a series of unfavorable credit rating ratings and a unexpected adjust in board command. Previous calendar year, the enterprise announced the “Avianca 2021” prepare less than which it reprofiled its credit card debt and lease obligations. It also elevated $375 million in new funding.
“Avianca is facing the most demanding crisis in our a hundred-calendar year record as we navigate the consequences of the COVID-19 pandemic,” main government officer Anko van der Werff reported. “Despite the constructive benefits yielded by our Avianca 2021 prepare, we believe that that, in the confront of a entire grounding of our passenger fleet and a recovery that will be gradual, moving into into this approach is a required move to deal with our economic troubles.”
Avianca reported it has “limited visibility” on when journey limits would be lifted and it predicted the consequences of the pandemic on journey to be extended-lasting.
Avianca, founded in 1919, was the 3rd-major airline in Latin The united states based on sector share at the end of last calendar year, according to Euromonitor.
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